Is it a good company at a reasonable price? This is an energy stock, so it is cyclical and risky. Analysts do no expect it to do well in 2025, but they expect 2026 to be a better year. There is insider buying and this is a positive. My stock price testing is showing the stock as currently being at a reasonable price.
I do not own this stock of Obsidian Energy Ltd (TSX-OBE, NYSE-OBE), but I used to. I bought this stock as Maximum Energy Trust (MXT.UN) in 1998. In November 2001, there was a stock exchange and the stock became Ultimate Energy Fund. In June 2004 fund changed from Ultimate Energy Income Trust to Petrofund Energy. Petrofund Energy merged with Penn West in July 2006. The company changed its name from Penn West Petroleum Ltd. (TSX-PWT, NYSE-PWE) to Obsidian Energy Ltd (TSX-OBE, NYSE-OBE) in 2017.
I sold my shares in 2010. Penn West is changing to a corporation, but they are also getting back into exploration, rather than just selling oil from their wells. It is time to sell. They also just reduced their dividends from $.15 per share per month to $.09 per share per month.
When I was updating my spreadsheet, I noticed that there is an earnings loss because the company took an impairment hit. There is a lot of insiders buying over the past year with concentration from March 2025. Over the past year all of the officers I follow bought more shares as did directors, especially the Chairman. The stock is cyclical. See returns for 5 and 10 years below.
If you had invested in this company in December 2014, for $1,003.59 you would have bought 59 shares at $17.01 per share. In December 2024, after 10 years you would have received $70.21 in dividends. The stock would be worth $493.24. Your total return would have been $563.45. This would be a total loss of 6.13% per year with 6.86% from capital loss and 0.72% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $17.01 | $1,003.59 | 59 | 10 | $70.21 | $493.24 | $563.45 |
If you had invested in this company in December 2019, for $1,000.68 you would have bought 1076 shares at $0.93 per share. In December 2024, after 5 years you would have received $0.00 in dividends. The stock would be worth $8,995.36. Your total return would have been $8,99.36. This would be a total gain of 55.15% per year with 55.15% from capital gain and 0.0% from dividends.
| Cost | Tot. Cost | Shares | Years | Dividends | Stock Val | Tot Ret |
|---|---|---|---|---|---|---|
| $0.93 | $1,000.68 | 1,076 | 5 | $0.00 | $8,995.36 | $8,995.36 |
The stock no longer pays a dividend so there is no current dividend or Dividend Payout Ratios (DPR).
Debt Ratios are fine. The Long Term Debt/Market Cap Ratio for 2024 is fine at 0.54 and currently at 0.65, but these ratios are better when they are below 0.50. The Liquidity Ratio for 2024 is good at 1.79 and 1.56 currently. The Debt Ratio for 2024 is good at 2.98 and 2.85 currently. The Leverage and Debt/Equity Ratios for 2024 are good at 1.50 and 0.50 and currently at 1.54 and 0.54.
| Type | Year End | Ratio Curr |
|---|---|---|
| Lg Term R | 0.54 | 0.65 |
| Intang/GW | 0.00 | 0.00 |
| Liquidity | 1.79 | 1.56 |
| Liq. + CF | 3.10 | 2.48 |
| Debt Ratio | 2.98 | 2.85 |
| Leverage | 1.50 | 1.54 |
| D/E Ratio | 0.50 | 0.54 |
The Total Return per year is shown below for years of 5 to 29 to the end of 2024. Under the Capital Gain column is the portion of the Total Return attributable to capital gains. Under the Dividend column is the portion of the Total Return attributable to dividends. See chart below.
| From | Years | Div. Gth | Tot Ret | Cap Gain | Div. |
|---|---|---|---|---|---|
| 2019 | 5 | 0.00% | 55.15% | 55.15% | 0.00% |
| 2014 | 10 | 0.00% | -6.13% | -6.86% | 0.72% |
| 2009 | 15 | 0.00% | -13.51% | -16.71% | 3.20% |
| 2004 | 20 | 0.00% | -1.64% | -14.28% | 13.81% |
| 1999 | 25 | 0.00% | 20.54% | -10.59% | 39.76% |
| 1995 | 29 | 0.00% | 8.84% | -10.62% | 19.20% |
The 5-year low, median, and high median Price/Earnings per Share Ratios are 0.17, 0.58 and 1.00. The corresponding 10 year ratios are negative so unusable. The corresponding historical ratios are 3.66, 5.80 and 7.06. The ratios are very low because of years of earnings losses. The current ratio is 4.88 based on a stock price of $7.42 and EPS estimate for 2025 of $1.52. This ratio is very low. This stock price testing suggests that the stock price is cheap.
I have Cash Flow from Operations (CFFO) data. The 5-year low, median, and high median Price/ Cash Flow from Operations Ratios are 1.10, 1.93 and 2.70. The corresponding 10 year ratios are 1.32, 2.21 and 2.82. The corresponding historical ratios are 1.96, 4.13 and 6.10. The current ratio is 1.03 based on a stock price of $7.42 and CFFO estimate for 2025 of $7.20. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is cheap.
I have Funds Flow from Operations (FFO) data. The 5-year low, median, and high median Price/ Funds Flow from Operations Ratios are 1.08, 1.78 and 2.26. The corresponding 10 year ratios are 1.45, 2.02 and 2.70. The corresponding historical ratios are 1.45, 2.81 and 4.22. The current ratio is 1.30 based on a stock price of $7.42 and FFO for last 12 months of $5.72. This ratio is below the low ratio of the 10 year median ratios. This stock price testing suggests that the stock price is cheap.
I get a Graham Price of $49.93. The 10-year low, median, and high median Price/Graham Price Ratios are 0.12, 0.21 and 0.28. The current ratio is 0.15 based on a stock price of $7.42. This ratio is between the low and median ratio of the 10 year median ratios. I am using the FFO values in this calculation because the P/GP ratio using EPS is compromised by the number of recent earning losses. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I get a 10-year median Price/Book Value per Share Ratio of 0.35. The current P/B Ratio is 0.38 based on a Book Value of $1,412M, Book Value per Share of $19.37 and a stock price of $7.42. The current ratio is 9% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable but above the median.
I get a 10-year median Price/Cash Flow per Share Ratio of 1.92. The current ratio is 1.88 based on Cash Flow per Share estimate for 2025 of $3.94, Cash Flow per Share of $287.1M and a stock price of $7.42. The current ratio is 2% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
I cannot do any dividend yield testing because this company no longer pays a dividend.
The 10-year median Price/Sales (Revenue) Ratio is 0.79. The current P/S Ratio is 0.76 based on Revenue estimate for 2025 of $714M, Revenue per Share of $9.80 and a stock price of $7.42. The current ratio is 4% below the 10 year median ratio. This stock price testing suggests that the stock price is relatively reasonable and below the median.
When I look at analysts’ recommendations, I find Strong Buy (1), and Hold (3). The consensus would be a Buy. The 12 month stock price consensus is $9.25 with a high of $10.00 and low of $8.00. The consensus stock price of $9.25 implies a total return of 24.66%, all from capital gains based on a current stock price of $7.42.
The last entry on Stock Chase is for 2022 and it is a Do Not Buy. Amy Legate-Wolfe on Motley Fool says this company is currently producing solid financial results. Christopher Liew on Motley Fool said this stock was currently cheap at $9.26. The company put out a Press Release about their fourth quarter results for 2024. The company put out a Press Release on their first quarter results for 2025.
Simply Wall Street via Yahoo Finance talk about the global market undervaluing small cap with recent Insider Activity including this stock. Simply Wall Street gives no risk warnings on this stock. I did find insider buying on this stock.
Obsidian Energy Ltd is an intermediate-sized oil and gas producer with strategic assets in Alberta. It operates in a single reporting segment that is exploration, development, and holding an interest in oil and natural gas properties and related production infrastructure in the Western Canada Sedimentary Basin. The company generates the majority of the revenue from the Crude oil sale. Its web site is here Obsidian Energy Ltd.
The last stock I wrote about was about was TMX Group Ltd (TSX-X, OTC-TMXXF) ... learn more. The next stock I will write about will be Artis REIT (TSX-AX.UN, OTC-ARESF) ... learn more on Friday, July 18, 2025 around 5 pm. Tomorrow on my other blog I will write about Open Banking.... learn more on Thursday, July 17, 2025 around 5 pm.
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